Since last year, a number of regulations have taken effect, including the new rules on the management of internet-facilitated lending by commercial banks and regulations requiring lenders to clearly disclose the comprehensive financing costs of personal loans.

　　In addition, the "Measures for the Administration of Online Marketing of Financial Products" came into effect on Sept 30. Zeng said this means compliance costs will rise further. Small and medium-sized lending facilitation platforms that lack sufficient capital, risk management capabilities or differentiated businesses are likely to be acquired or exit the market, while leading platforms will consolidate their market share by leveraging their advantages in funding costs and technology capabilities, further increasing industry concentration.

　　"From funding sources and product pricing to advertising and marketing, financial regulation now covers the entire business chain. This marks the internet-facilitated lending market's transition from a period of extensive growth to a new stage of more standardized, transparent and sustainable development," said Dong Ximiao, chief economist at Merchants Union Consumer Finance and executive director of the Shanghai Institution for Finance and Development.

　　"Over the next three to five years, lending facilitation institutions are expected to gradually shift from traffic channels to technology service providers. Compliance will no longer be a competitive advantage, but the basic requirement for doing business," Dong said.